Ready for your retirement?
Set yourself up for success with a little planning
Whether it’s ten years away or just around the corner, it’s time to start your retirement planning.
While there’s no retirement age in New Zealand, generally you can access your KiwiSaver funds once you turn 65. There are several ways you can access your money and the one you choose will depend upon your retirement plans and your lifestyle. Here’s a quick guide to help you choose what’s best for you.
What are my options?
You can generally access your KiwiSaver funds once you reach the age of eligibility (which is currently 65). If you joined KiwiSaver before 1 July 2019 and were aged between 60-64 when you joined, you previously wouldn’t have been able to withdraw from your KiwiSaver account until you’d been in the scheme for 5 years. From 1 April 2021, you can now opt out at any time after you’re 65. Once you’re eligible, you can choose to withdraw it as one lump sum, in regular withdrawals, or as you need.
Withdrawing your KiwiSaver funds as a lump sum
When you withdraw your KiwiSaver funds in one go, you’ll be getting all the employer and government contributions you’ve accumulated since you opened your account.
This means you’ll be responsible for your own budgeting, but it also gives you the flexibility to pay off your mortgage, take a retirement holiday with your family, or choose your own investments.
If you want to keep investing after withdrawing from your KiwiSaver account, you could consider our Managed Funds. Kiwi Wealth Managed Funds offer similar investment options as our KiwiSaver scheme, but with slightly lower fees and without employer or government contributions.
Setting up regular KiwiSaver withdrawals
You can keep your KiwiSaver account open and set up regular withdrawals to supplement your NZ Super payments. Depending on your needs, you can choose weekly, fortnightly, or monthly payments.
The benefit of keeping your KiwiSaver account open is that it will remain invested, and could potentially earn a better return than other forms of savings accounts.
Withdraw your KiwiSaver funds as you go
Once you’ve got access to your KiwiSaver funds, you can take out money as you need it. Before completing your first withdrawal, your KiwiSaver provider will confirm your eligibility. After that you’re free to withdraw money whenever you need. As with setting up regular payments, keeping money in your KiwiSaver account means it will still be invested.
Keep building that nest egg
Can I make KiwiSaver contributions after 65?
You can continue to make contributions to your KiwiSaver account at any time. In fact, having the ability to contribute and withdraw at any time after 65 makes KiwiSaver a flexible investment option.
Will the government or my employer make KiwiSaver contributions after 65?
In most cases, the government and your employer will stop contributing to your KiwiSaver account once you turn 65. If you’re continuing to work after 65, you can ask your employer if they’ll keep contributing to your account.
When you turn 65, NZ Super will become payable for most Kiwi. See Work and Income to determine your eligibility and the amount you’ll receive.
Finding the right fund
With so many different types of funds to choose from, it can be hard to know which one is right for you
There are many different things to consider when picking a KiwiSaver fund, including the level of risk you’re comfortable with and how long you want to invest. If you’re with Kiwi Wealth, you can log into myKiwiWealth to get a tailored recommendation on which fund is right for you and your retirement.
How much do I need to retire?
It really depends on the kind of retirement you're after
The ‘No Frills’ Retiree
The 'no frills' lifestyle choice has a modest retirement with limited budget. Based on a Massey University study, the no frill retiree will spend around $600 a week in a city area or around $570 in a town for a single. For a couple, these figures increase slightly to $898 for city living and $639 in a town.
The ‘Choices’ Retiree
The ‘choices’ lifestyle may include travel and more spending money for eating out, clothes or other extras. These retirees will spend around $1190 in a city and $830 in a town. This lifestyle for a couple is slightly higher, at $1436 for city living and $1135 in a town.
Need to know more?
Whatever you choose, it’s a good idea to think about how much you have in retirement savings and if this will enable you to cover all your regular bills and most importantly, live comfortably without worrying about money.
It can be a good idea to have a financial plan in place, taking into account NZ Super payments and any other income.
And if you’re looking for more information on how much you need to retire, Kiwi Wealth has a bunch of great resources to help you on your way. It’s easy to set a retirement goal in myKiwiWealth to see how much you’ll need to retire, and it even lets you include your other assets and savings for a more accurate picture of what your retirement might look like.
There’s no denying that retirement is expensive and planning for it can seem daunting. But by understanding your KiwiSaver account and how you can make it work best for you, you’re taking a step in the right direction.
This information is provided in a general nature only and should not be construed as or relied on as financial advice. This is not a recommendation to invest in a particular financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any investment decisions.
Past performance is not a reliable indicator of future performance. The value of your investment may go up and down.